New opportunities for Grenaa Motorfabrik

Grenaa Motorfabrik reconditioned a ship's engine for a new client on Malta. The client needed financing, and Grenaa Motorfabrik wanted to protect itself against the risk of loss with the assistance of EKF.

Our customer on Malta was thrilled by the solution, which gave them the cash flow to realise the project

Ebbe Sørensen, Managing Director, Grenaa Motorfabrik

​In 2009, Grenaa Motorfabrik took an order for supply of a reconditioned ship's engine for a transport firm on Malta which specialises in shipping live fish to customers in the Mediterranean.

The order worth approx. DKK 1 million was vital for Grenaa Motorfabrik and represented a significant percentage of the company's turnover in marine systems exports.

"It didn't take long to finalise the details of the contract with our client on Malta, but the client was only in a position to place the order if a financing arrangement could be made", says Ebbe Sørensen, Managing Director at Grenaa Motorfabrik.

Ebbe Sørensen therefore faced the challenge of finding a solution for financing the client's order.In addition, Grenaa Motorfabrik wanted to avoid a situation in which it might face sole liability for any loss.

​Ebbe Sørensen had read about EKF in newspapers and contacted EKF to look into the options for insuring Grenaa Motorfabrik against the risk of loss and for assisting the Maltese client in financing the export order.

"We benefited from a very helpful process with EKF where we were thoroughly informed of the various options. EKF also assisted in familiarising our bank with the procedures for EKF credits and guarantees", says Ebbe Sørensen.

​Grenaa Motorfabrik granted the Maltese buyer a credit facility on the order. EKF covers 90 per cent of the company's loss if the buyer defaults on payment.

Grenaa Motorfabrik, however, received advance payment on the order, as the bank purchased the future payments from Malta. This assured Grenaa Motorfabrik of cash flow while it worked on filling the order.

This was Grenaa Motorfabrik's first contact with EKF and it opened up new opportunities for the Danish firm and its international clients. The Danish plant supplied the reconditioned ship's engine in the summer of 2010, after which it was installed by the client.

"This was an important order for us, as it opened up new opportunities. It was our first order for a company on Malta. The company sails from port to port in the Mediterranean, and as the client was very appreciative of the whole arrangement, we hope that word gets round to other potential clients for Grenaa Motorfabrik", says managing director Ebbe Sørensen.